This strategy not only provides one with the chance to leverage one's position in Total SA (NYSE:TOT) but it always provides one with the chance to get into the stock at a much lower price. This technique should only be employed if you are bullish on the stock. If you are not bullish on the long term prospects of this stock, then you would be better served by looking for other plays.

Reasons to be bullish on Total SA :

A good yield of 6.1%

A great long-term debt to equity ratio of 0.33

A strong levered free cash flow of $2.2 billion

A 5 year dividend growth rate of 4.82%

Year over year growth rates of 5.2% and 7.2% for 2012 and 2013 respectively

A decent quarterly revenue growth rate of 12.4%

Net income has increased from $12.03 billion in 2009 to $17.523 billion in 2011.

Cash flow jumped from $9.53 in 2009 to $11.51 in 2011.

Annual EPS before NRI increased from $4.85 in 2009 to $6.82 in 2011.

A good retention rate of 53

A good 5 year ROE average of 23.71%

A very strong interest coverage ratio of 36.8

A decent free cash flow yield of 3.5%

Cash flow from operations increased by 10.9% to $27.1 billion at the end of 2011 Vs 24.5 billion in 2010.

$100K invested for 10 years would have grown to $182K. If the dividends were reinvested the rate of return would be much higher.

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This 10 year chart clearly illustrates that Total SA, has pretty strong support in the 40 ranges. A weekly close above 48 will be the first sign that the stock is potentially ready embark on a trend change and move higher. This strategy has two parts to it.

Part I

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As both the general markets and oil are still in corrective phases, there is a pretty decent change that it could test the 40 ranges. We would wait for a test of this zone and then sell the Jan 14 37.50 puts. They are currently trading in the 5.50-6.00 ranges and should easily trade past 6.00 if Total dips down to the 40 ranges. For this example, we will assume that the puts can be sold for 6.00. For each contract sold $600 will be deposited in your account.

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We would then use the proceeds from the sale of the puts to purchase calls. The Jan 2014 50 calls are trading in the 2.60-2.80 ranges. If Total drops down to 40, these calls should trade at $2.00 or lower. For this example, we will assume we are able to purchase the calls for $2.00. Now you have the option of purchasing 1-3 calls for each put you sold. If you purchase fewer calls, you will have cash over, which could help offset your entry price if the shares happened to be assigned to your account. However, if you're bullish on the long-term prospects of Total and feel that oil will be trading significantly higher 8-12 months from now, then purchasing three calls for each put sold might be the way to go.

Risk factor

If the stock trades below the strike price, you sold the puts at, (37.50), then the shares could be assigned to your account. Depending on the number of calls you purchased your final cost per share would range from 33.50-37.50. This should not be a big deal as to begin with you were bullish on the prospects of this stock, and now you potentially have a chance to get into this stock at a lower price.

This strategy provides you with the opportunity to leverage your position for free and pocket up to $400, depending on the number of calls you purchase. As stated above, the risk is that the stock trades below the strike price of the puts you sold. In this case, the shares could be assigned to your account. Your final cost will depend on the number of options you purchased and could range from 33.50-37.50 per shares. If you are bullish on the long-term prospects of this company, then getting in at a lower price should not be big deal. This is why it's important that only those who are bullish on the long term prospects of Total consider utilizing this strategy. If this stock does not appeal to you, then you might find these articles to be useful Halliburton: A Potentially Great Entry Point, Or The chance to earn 8% and Duke Energy Corp: A Good Long-Term Investment?

Sources: EPS and Price Vs industry charts obtained from zacks.com. A major portion of the historical data used in this article was obtained from zacks.com. Earnings and growth estimate data provided by dailyfinance.com. Option's table data and insider transactions sourced from yahoofinance.com

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: This list of stocks is meant to serve as a starting point. Please do not treat this as a buying list. It is imperative that you do your due diligence and then determine if any of the above plays meet with your risk tolerance levels. The Latin maxim caveat emptor applies - let the buyer beware